Greater Seminole County Real Estate Report: 10-28-20: A Release and Cancellation of Contract is a part of many real estate transactions. What is the purpose and how do you know if you need one?
A Release and Cancellation of Contract is a part of many real estate transactions between the buyer and the seller. What do you need to know about a Release and Cancellation of Contract? Let me share with you the purpose of this agreement and the circumstances in which one may not be used.
The Purpose of a Release and Cancellation of Contract
This document is a two-part agreement. It is between the buyer, the seller, and both of their agents. First, it fully releases all parties who entered into the contract. For example, this includes any known or unknown obligations that may arise.
The second part provides instructions on how to handle escrow if the parties choose to cancel the contract.
Reasons for Not Having This Agreement Included in a Transaction
Every situation is different when buying and selling a home. For instance, not every real estate transaction will include a Release and Cancellation of Contract agreement. These are the three most common reasons that parties choose not to include the agreement as a part of the transaction:
- Cancellation and release procedures are already covered in the contract – This means that it is not necessary and would be redundant to include.
- The inability to agree – Both parties must agree on how escrow is to be disbursed. Next, the document must contain all signatures for validity.
- Preventing legal barriers – By signing the agreement, the Waiver of Liability Section may prevent parties from being able to take legal action. However, this may deter parties from signing the agreement.
Do You Need a Release of Contract Agreement?
A reputable Realtor can help you decide if this agreement should be a part of your real estate transaction when buying a home. As Lake Mary’s leading real estate agency, I am here to walk you through every step of the home buying or selling process. Please feel free to contact me with any questions you may have at firstname.lastname@example.org or 407-330-2181. Until next week, happy home buying and selling!